Monday, July 4, 2022

Budget deficit anticipated for financial year 2013/14- Econsult

Renowned economists at a private economic and development consultancy firm, Econsult Botswana have said that although there were general perceptions of cutbacks in government spending in 2013, this was not the case, as government spending actually increased.

The Econsult findings are supported by the government Budget Strategy Paper, prepared by the Ministry of Finance and Development Planning which was published in October last year showing that the government spending in 2013 went up by 10 percent over the previous year while development spending increased by 48 percent.

The paper shows that the government’s total expenditure was estimated to reach P43 billion with recurrent budget amounting to P33.9 billion and development expenditure at P9.13 billion. Sunday Standard understand that the increase in overall spending was driven largely by personal emoluments as it accounts for the largest share of recurrent expenses of over 30 per cent.

The economists, Thabelo Nemaorani, Bogolo Kenewendo and Dr Keith Jefferies, who previously worked as Deputy Governor for the Bank of Botswana (BOB) state in their company’s quarterly review of the domestic economy that as a result of unanticipated spending on power supplies and drought re┬¼lief, the government is now anticipating to report a budget deficit for the financial year 2013/14.

Just like in the previous four years, it is expected that the government’s proposed budget for 2014/15 will focus on four priorities being, completion of ongoing projects and maintenance of existing infrastructure, accelerating poverty eradication programmes, investing in projects that promote economic growth and improving service delivery.

At the same time, estimates as stated in the Budget Strategy Paper for the soon to be delivered 2014/15 budget shows a surplus budget with a marginal increase. Total revenue and grants are forecasted to increase by a mere 2.9 percent.

According to the paper, Government’s total revenue and grants might increase from P43.8 billion in 2013/14 to P46.06 billion in 2014/15, due to expected improvement in both tax and non-tax revenues.

The three Econsult economists agree with the ministry’s projections on a likely budget surplus but warn that, “Combined with a mod┬¼est increase in anticipated revenue, this should be enough to generate a small budget surplus. However, those who are seeking relief from fiscal austerity ÔÇô whether actual or perceived ÔÇô are likely to be disappointed”.

Econsult staff is well known as experts on the Botswana economy, and as well have extensive experience in the Southern African Development Community (SADC) region. They have also worked professionally in East & West Africa, and the Caribbean.

Finance and Development Minister Kenneth Matambo is expected to make the national budget proposal on February 3.

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